Korean business community in depths of crisis; Among the owners of major business groups, eight chief executives are currently detained or sentenced to imprisonment, marking the largest number since the May 16 military coup in 1961

Korean business community in depths of crisis

Kim Eun-pyo, Noh Won-myung

Korea’s business community is moaning in the wake of a series of detentions of top business leaders. Business conglomerates are already triply distressed by reduced competitiveness, cash crunch and poor business performance in a protracted global recession. Business groups which have sought speedy growth buttressed by family owners in the global market have hit a snag in their long-term strategy. SK Group and Hanwha Group, the nation’s third and 12th largest conglomerates, respectively, are in this case. Among the owners of major business groups, eight chief executives are currently detained or sentenced to imprisonment. Some say it marks the largest number since the May 16 military coup in 1961. The market is already weighed by concerns over a liquidity crisis caused by a series of downfalls of Woongjin, STX, Pantech and more recently Tongyang, which had brought a new wave of change in the local business community. Rumors are already swirling that some of the nation’s top 30 business groups may be hit by a severe liquidity crunch although little signs are surfacing. “Authorities should pay attention that there is a serious optical illusion in Korea’s industry situation due to upbeat sales of Samsung Group and Hyundai Motor Group. If they rest on some positive economic figures of foreign exchange reserves and trade surplus, the Korean economy could face a big crisis as early as next year,” warned Jangwoo Lee, Professor of Kyungpook National University.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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